Gibralter Insurance Company uses a flexible overhead budget for its application-processing department. The firm offers five types of policies, with the following standard hours allowed for clerical processing. Automobile Renter's 1 hour 1 hour Homeowner's Health Life 2 hours 2 hours 4 hours The following numbers of insurance applications were processed during July. Automobile 450 Renter's 400 Homeowner's 300 Health 600 Life 400 The controller estimates that the variable-overhead rate in the application-processing department is $5.00 per clerical hour, and that fixed-overhead costs will amount to $4,000 per month. Required: 1. How many standard clerical hours are allowed in July, given actual application activity? 2. Why would it not be sensible to base the company's flexible budget on the number of applications processed instead of the number of clerical hours allowed? 3. Construct a formula flexible overhead budget for the company. 4. What is the flexible budget for total overhead cost in July? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 How many standard clerical hours are allowed in July, given actual application activity? Standard Policy Type Hours Allowed Automobile Renter's Homeowner's Health Life Total < Required 1 Required 2 > 4. What is the flexible budget for total overhead cost in July? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Why would it not be sensible to base the company's flexible budget on the number of applications processed instead of the number of clerical hours allowed? Basing the flexible budget on the number of applications would give a misleading estimate of overhead costs because different types of applications require different amounts of clerical time. A flexible budget based on applications processed would ignore fixed costs. A flexible budget based on applications processed would be misleading because variable overhead costs are not related to the number of applications processed. Basing a flexible budget on the number of applications processed is not sensible because the same number of applications may not be processed each day. < Required 1 Required 3 > Required: 1. How many standard clerical hours are allowed in July, given actual application activity? 2. Why would it not be sensible to base the company's flexible budget on the number of applications processed instead of the number of clerical hours allowed? 3. Construct a formula flexible overhead budget for the company. 4. What is the flexible budget for total overhead cost in July? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Construct a formula flexible overhead budget for the company. Total budgeted monthly overhead cost = Budgeted variable overhead cost per X Total clerical hours Bugeted fixed clerical hours + overhead cost per month X clerical hours + The Convien estimates mal me vanapie-oveneau late in the applicativN-PROCESSny department is $5. per imitantivul, altu uital fixed-overhead costs will amount to $4,000 per month. Required: 1. How many standard clerical hours are allowed in July, given actual application activity? 2. Why would it not be sensible to base the company's flexible budget on the number of applications processed instead of the number of clerical hours allowed? 3. Construct a formula flexible overhead budget for the company. 4. What is the flexible budget for total overhead cost in July? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 What is the flexible budget for total overhead cost in July? Total budgeted overhead cost < Required 3 Required 4 >